Interview: Bill McNeil, Former Manager of ESRI’s BusinessMAP Group

By
Hal Reid

Ed. Note: Hal Reid has worked with Bill McNeil in various capacities over the years.

Almost 14 years ago, ESRI purchased a Dallas-based LBS
company called Chrona Software. Chrona's owner, Bill McNeil, became
manager of ESRI's newly formed BusinessMAP group. Hal Reid, independent
consultant with Hmmm Resources, interviewed McNeil about his background
and his insight into the LBS market and where he thinks it is going.

Hal Reid (HR): How did you end up in what became the LBS marketplace?

Bill McNeil

Bill McNeil (BM): Back in the '90s I was working as a regional
salesperson and using ACT [contact management software solution] to
keep track of my accounts. It occurred to me that it would really be
interesting and productive to see my customers and prospects on a map.
I could make more sales calls faster if I knew the location of other
customers around or between appointments.

ACT was also based in Dallas and I was fortunate enough to make a deal
with Pat Sullivan, ACT's president. He agreed to put a product brochure
in each copy of ACT shipped if I developed a mapping program that would
map (geocode) contacts from the ACT database. I then flew to New
Hampshire and struck an agreement with GDT, now Tele Atlas, to license
its data on a test market basis. I worked with a local developer and
one in the U.K. When we were finished MapLinx was launched, then sold
to Merit Technologies, and it ramped up to over $5 million in annual
sales.

HR: When did ESRI enter the picture?

BM: I sold MapLinx to Merit, worked there for a couple years, then
went back out on my own. In the spring of '95, with six young Russian
developers, I started another mapping company called Chrona Software.
At the time the Department of Commerce offered SABIT or Special
American Business Internship Training program. I'm not sure this is
still available now but back then the U.S. government funded technology
training for Eastern European scientists and engineers. We qualified
for the program and with this aid we were able to fund the start-up
phase of Chrona.

HR: What did you and your Russian developers build and when did you bring the product to market?

BM: We built a desktop CRM mapping application that geocoded
contact databases like ACT and GoldMine. At the beginning the product
was limited to rendering a dot or thematically color-coded map but it
also included basic territory design features. The program was never
released under the Chrona brand because ESRI purchased my company
before the launch.

HR: So when did you release your first product under the ESRI label?

BM: We launched BusinessMAP 1.0 in February of '96. Although we
developed software for the CRM market that had features similar to
today's "LBS" apps, we never referred to BusinessMAP as an LBS
solution. In my memory that acronym didn't become popular until the
2000s.

HR: Now that you've left ESRI what are your plans?

BM: I've enjoyed my tenure at ESRI but I want to become an
entrepreneur again. Despite the current economic conditions I think
this is a great time to develop LBS applications.

HR: Where do you see the LBS market going?

BM: If you step back and historically look at different industries
there are many similarities to the current GIS market. Prior to the end
of World War II most of the non-commuter public transportation was
carried by rail. After the war most people moved to air travel. Many
economists and historians feel train companies lost the business
because they defined their market as rail transportation rather than
the broader transportation market.

This is exactly what is happening now with the traditional GIS
companies. They are retrenching and defining their market as GIS not
LBS. This would certainly seem to make sense given the fact that few
LBS companies are financially successful. Many LBS start-ups can't even
give away their software.

The fact is, just as rail companies couldn't transition to air travel,
established GIS concerns won't be able to transition to LBS, even if
they want to. Their costly infrastructure, slow product development
cycle, distribution network and expensive products just don't fit the
LBS model.

HR: So where do you see us going from here? On one hand, you say
established GIS can't afford to move into the LBS world, yet you point
out that few LBS companies are profitable.

BM: Unfortunately there are a couple of things that don't bode well
for the GIS guys. For one, traditional GIS markets are becoming
saturated. Most large corporations and government entities already use
GIS. These are not high growth markets compared with commercial GIS.

Secondly, competition is becoming brutal. Virtual Earth, Google,
MapQuest and the others don't have the same revenue model. Much of
their income is advertising based. Carriers like T-Mobile, Version and
AT&T will also exert competitive pressure, as will the handset
makers like RIM and Nokia.

Third, distribution is changing to an SaaS environment. Future software
will be Web accessed, subscription based. This is already taking place
with companies like Salesforce.com, Intuit and Apple's app store. In
other words, you don't need a large distribution network to effectively
compete; even small start-ups can succeed with the right software and
funding.

Fourth, some existing GIS companies are either in complete denial or
don't recognize the threat. Even if they understand the problem, it's
difficult to introduce new, less expensive solutions that cannibalize
established revenue producing product lines.

Finally, LBS is hot again and despite sparse revenue models, hundreds
of LBS start-ups are in play. Surprisingly some of these have been
funded and a few will actually prosper. Many of those that succeed will
do so because they crossed the line and developed GIS applications. In
other words, companies that have staying power will pull business from
the less nimble, high priced, established GIS companies. This is the
perfect time to offer less expensive GIS solutions. Government agencies
and private organizations alike are looking to save money.

HR: You don't see a future for established GIS companies?

BM: Sure, they will persevere by supporting their installed base
but they won't be as dominate. New companies with faster
development cycles and less expensive solutions will also become major
GIS players. This will be especially true in the commercial GIS space.
HR: Are you including ESRI in this mix?

BM: I really can't comment specifically on ESRI. I can say it was a
great company to work for: good benefits, treat their employees well,
and a stable career type company with few layoffs. A very different
environment from the venture-funded, high risk/reward situation
start-ups are faced with today.

HR: Do you see any killer apps or disruptive technology changing the landscape for the industry?

BM: Not really. You might think, with their deeper pockets, GIS
companies would be in a better position to research innovative
solutions, but the fact is disruptive technologies don't usually come
from within the industry they disrupt. I believe the process will be
more evolutionary than disruptive, with some LBS companies ultimately
becoming major GIS players.
HR: What do you think the industry will look like in, say, 10 years?

BM: As you know, GIS is a horizontal technology that cuts across
many disciplines. Traditional GIS is well established in oil, gas,
electric, pipeline, water/waste water, telecommunication and forest
industries, just to name a few. There will be growth in these areas but
not compared with the real upside potential of the commercial sector.
Stuff like building sales and service territories, site analysis, real
estate, insurance and banking have the potential of becoming much
bigger than the existing GIS market.

I also see the market as much more fragmented. The landscape has
changed significantly over the last decade and barriers to entry have
changed and moved. Producing a mapping program 10 years ago not only
required code development but also licensing expensive spatial data,
manufacturing DVDs, designing and printing boxes/instruction manuals
and paying assembly costs. This was capital intensive compared to
today's scenario. Now anybody with a kitchen table, computer, developer
skills and funding can build and market world class GIS applications.
Google, Microsoft and MapQuest all have APIs that enable programmers to
access their base maps and, if they're willing to endure
advertisements, inexpensively host their application. These sites even
offer shopping carts so developers don't need to worry about the
payment process.

Lowering of these development, publishing and distribution barriers has
made it easier and profitable to serve small niche markets, for those
who get there first. There are, however, natural market forces at work
and when some fences come down, others go up. Nothing has gone up
faster than the cost of getting search engine recognition. There is no
correlation between quality, useful applications and their ability to
rank on the results page of Google or Yahoo. Bottom line, if your site
doesn't serve a unique niche market, have lots of quality content with
quality links and have promotional funding, your app probably won't get
ranked high enough for people to find you. And, if they can't find you,
you're not in business - no matter how great the app.

HR: Do you envision having a role in this process?

BM: Yes, I'm developing a Web-based subscription (www.texmobile.com) to serve the market now that ESRI is retiring BusinessMAP.